April 18, 2016
Three Things I’m Watching
Health insurers continue to say they are struggling to find a financially viable way to participate in the health insurance exchanges established by the Affordable Care Act. The Kaiser Family Foundation’s Larry Levitt recently told The Hill that “Something has to give. Either insurers will drop out or insurers will raise premiums.” Levitt goes on to note that “The industry is clearly setting the stage for bigger premium increases in 2017.” The Obama administration continues to express confidence in the long-term stability in of the health insurance exchanges because of the growth in enrollment.
As requests for large premium increases need to be filed soon, expect to see more discussion at the national level about the cost of premiums and the viability of the health insurance markets in the Affordable Care Act. Although state insurance regulators may be reluctant to approve drastic premium increases, they will have to make some allowances to enable health insurance companies to continue operating in the health insurance exchanges. If the health insurance market does indeed begin to stabilize over the long-term, as the administration predicts, the need for premium rate increases should start to decline.
On Monday, the Centers for Medicare and Medicaid Services (CMS) at the Department of Health and Human Services (HHS) launched the Comprehensive Primary Care Plus model. The model is intended to move primary care practices away from the traditional fee-for-service Medicare and Medicaid reimbursement models and toward a system focused more on patient outcomes and management of patient care. The new model builds on a previous initiative launched in 2012 and emphasizes support for patients with chronic disease, preventive care, patient engagement, and coordination with hospitals and other clinicians. According to CMS, the effort will be implemented in 20 regions and can accommodate up to 5,000 practices
The initiative is being administered through the Center for Medicare and Medicaid Innovation (CMMI) and is part of the delivery reform efforts that were enacted by the Affordable Care Act. Since implementation of the ACA, the administration has launched several such initiatives with the intention of lowering the cost of care, creating better patient outcomes, and transforming the way Medicare and Medicaid pay for care.
On Wednesday, the Government Accountability Office (GAO) released its annual report to Congress on opportunities to reduce duplicative goals and activities within the federal government. The report also identified opportunities to reduce inefficiencies and achieve savings. From the health policy perspective, GAO’s report is interesting because it identifies areas in the Medicare and Medicaid programs where operations could be improved or money could be saved. The proposal that may have the biggest impact on the hill is GAO’s recommendation to equalize Medicare payments for some health care services which currently vary depending on where the service is performed. As an example, GAO points to health care services which can be performed in either physicians’ offices or hospital outpatient departments. Legislation passed into law last year that would equalize payments by reducing reimbursement for services performed in new hospital outpatient departments remains the subject of much lobbying in Congress. GAO’s continued endorsement of lower payments could prove problematic for those seeking changes to the policy.